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MSME

 

Target group

 

All existing SME units, as per new definition, run by Individuals, Proprietorship / Partnership firms, Limited Company, Trust, Society

Eligibility

 

The unit / borrower should have sufficient net worth/source of funds to pay for the margin and initial recurring expenses. Conduct of the existing account must have been satisfactory.

Entry level credit rating should be SBS 5. No deviations to be allowed in entry level norms.

Purpose

 

To purchase transport vehicles for delivering their products / Services. Educational institutions also eligible for transport vehicles for providing transportation services to students / faculty / staff. Only new vehicles will be considered. Second hand vehicles not permitted under the scheme.

Items to be financed

 

Chassis + Body building costs + registration , insurance , road tax, accessories AMC etc.

Nature of facility

 

Term Loan

Repayment

 

To be repaid in 84 equated monthly installments inclusive of moratorium of maximum 3 months.

 

Appraisal of loan

 

The economic viability should be worked out as per the overall income generated and surplus for loan installment / interest payment from the existing business operation of the unit.

Average DSCR should be minimum 1.25.

Margin and Asset Coverage Ratio

 

Margin will be 20% of the cost of vehicle on road (chassis, body building and initial insurance, registration ,Road Tax & AMC).

Rate of Interest

 

The rate of interest shall be applicable to existing credit rating of the account as well as aggregate credit limit arrived at after clubbing proposed finance for vehicle .

Processing and Documentation charges

 
For accounts falling within regulatory definition of MSME : 
In terms of HOBC : 102/218 dt. 20-03-2009.
For accounts not falling within regulatory definition of MSME but within the new definition of SME :
In terms of HOBC: 102/119 dt.19-09-2008.

Security

 
  •  Primary : Hypothecation of the vehicle purchased out of the proceeds of the loan. Bank’s name as charge holder to be got entered in the books of the RTO and also the Registration certificate.
  • Collateral : Micro and Small (Services Enterprises), can be sanctioned collateral free term loan up to Rs. 100 lakhs, subject to coverage under guarantee provided by Credit Guarantee Fund Trust for Micro & Small Enterprises.(CGTMSE) For loans above Rs 100 lakhs , suitable collateral security to be obtained depending upon the merits of individual cases.